Syria Elite Dance to Dawn as Risk of Assad Collapse Fades

April 19 (Bloomberg) -- Sometime after midnight on a recent
Thursday in Damascus, restaurant manager Aziz Asfahani joined
friends at the newly opened Bartini lounge bar, where Syria’s
elite dine and dance till dawn on tabletops to the thump of
patriotic songs.

“People seem more comfortable and the international
situation is more relaxed,” said Asfahani, 30. Last month, at
the height of international pressure on President Bashar al-Assad’s government, Syrians were disinclined to venture out,
leaving restaurants and bars less than half full, Asfahani said
in a telephone interview.

Highbrow social and cultural life continues in the city’s
downtown area. An audience of about 700 saw the U.K. conductor
Howard Williams, indirectly funded by the British Council, at a
Syrian National Symphony Orchestra concert on April 3. Williams,
who said in an interview that he attended to show support for
Syrian musicians, also noted that much of everyday life goes on
amid an “inescapable” military presence and checkpoints.

An improved mood among upper-class supporters of President
Bashar al-Assad follows army advances against lightly armed
rebel opponents which preceded last week’s cease-fire accord to
end the 13 month-long civil conflict. The subsequent crackdown
has left more than 9,000 dead, according to the United Nations.
The truce, monitored by UN personnel, has been patchily observed
with Syria’s opposition saying shelling of residential areas has
continued.

‘Decade of Instability’

Security forces killed at least 46 people yesterday, the
Local Coordination Committees said in an e-mail, while the
French Foreign Minister Alain Juppe will host a meeting in Paris
today to discuss further action against the Syrian government
and in support of the opposition.

“We are against any demands for the president to leave,”
Asfahani said. “People look at what’s happening in Egypt and
Libya and they don’t want the same to happen to them.”

The business elite is largely drawn from the majority Sunni
community, concentrated in Damascus and Syria’s second-largest
city, Aleppo. They have mostly stood by Assad, even though the
president and many of his top security officials belong to the
Alawi minority sect, which is affiliated to Shiite Islam. The
private sector includes communications, export and import,
agriculture, textiles and food canning, though many areas of the
economy remain state-owned.

“They’re frightened that a victory for the opposition
means a decade of instability” if rural-based anti-Assad forces
lacking economic competence take power, said Joshua Landis,
director of the Middle East Studies program at the University of
Oklahoma in Norman, who once lived in Syria.

Secure Investments

The commercial elite see the opposition as “a disorganized
bunch of country bumpkins” who will take over and “stuff the
ministries full of their friends,” Landis said.

“The richest Syrians have ‘wikaleh’ or the exclusive right
to import a certain product, which can make them very rich,”
Landis said. In addition, the country’s wealthy have put their
money into land and real estate which are viewed as among the
most secure investments, he said.

Syria’s uprising began in March 2011 when protesters in
several cities and towns took to the streets to demand political
changes, including an end to the emergency law suspending many
individual rights. Assad, whose family has run the country since
his father, Hafez, became president in 1971, was slow to
respond, leading protesters to extend their demands to include
his removal.

Output Shrinks

“Those who have been connected to the regime and whose
interests lie with it, they simply don’t feel the pressure to
move away from the regime,” Salman Shaikh, director of the
Brookings Doha Center, said in a telephone interview. “In fact,
the last two months they’ve probably decided it’s not the time
to move.” Government supporters believe that Assad is winning
and is crushing the security threat, he said.

Even so, the conflict has inflicted serious damage on the
country’s economy.

Syrian output shrank by 3.4 percent last year according to
a March report by the Economist Intelligence Unit, and will
contract another 5.9 percent this year. The country’s budget
deficit will probably widen to 18 percent of gross domestic
product, the EIU forecast.

Oil output probably dropped to about 280,000 barrels a day
in January from an average of 390,000 barrels in 2010, according
to the Paris-based International Energy Agency. Western
sanctions have forced Syria to seek buyers in Asia who are
likely to demand discounts, the EIU said.

The pain has been worst for middle and lower-income groups,
said Bassam al-Malak, a Damascene merchant and member of the
board of the Chamber of Commerce who belongs to the National
Coordination Committee, an umbrella for opposition groups, in
interviews from the capital.

‘Tiny Minority’

Other rich Syrians have simply left the country for the
duration of the troubles, “because there’s nothing that they
can do at the moment, there’s no business being conducted
whatsoever” said Ayesha Sabavala, Syria economist at EIU.

Those who have stayed and enjoy the capital’s nightlife
“are a tiny minority whose lifestyle doesn’t represent the
lifestyle of the rest of Damascus,” al-Malak said. Pro-government Syrians are “those who benefited from the regime and
they want to safeguard their gains.”

The country’s currency has plunged in value from 47 pounds
per dollar to 72 pounds per dollar. Power cuts can often last
for half the day.

Manufacturers have also suffered, with about 60 percent of
factories that produced kitchenware, textiles, canned food and
other products forced to close down, mainly because they cannot
sell their goods abroad due to the sanctions, al-Malak said.
Those producers still open have slashed staff by 40 to 60
percent, he said.

‘Playing Both Sides’

Andrew Tabler, a fellow at the Washington Institute for
Near East Studies and author of a study of U.S.-Syrian
relations, said some business leaders are “playing both sides
of the fence,” covertly funding the opposition while not
publicly abandoning Assad. For such figures, “now comes the
hard part,” deciding which side they’re on, he said.

A regular European visitor to the city, who asked not to be
named for reasons of personal security, said that among educated
Syrians he’d met, even those who opposed the government, there
were severe misgivings about what might follow Assad’s rule.
They feared a possible rise to power of extreme Islamists, he
said.

Meanwhile, government supporters such as Amir al-Abed
project a business-as-usual attitude. Al-Abed, one of Bartini’s
owners, opened the lounge last month, undeterred by the
conflict.

‘Why Be Scared’

“Why should we be scared?” al-Abed said in a phone
interview on March 30. He said he expected 210 diners that
night. The restaurant’s official capacity is 150.

Asfahani is having a similar problem at his restaurant,
Naranj, just off the Biblical-era Straight Street in Damascus’
old town, where Assad has been seen dining in the past.

Ranked the city’s No. 1 by reviewers on the tripadvisor
website, it too is fully booked again. “If you don’t have a
reservation for tonight, you don’t eat here,” said Asfahani in
a March 30 telephone interview.